From 1997 through most of 1999, KEDO conducted work at the Kumho site under the Preliminary Works Contract (PWC) signed by KEDO and the Korea Electric Power Corporation (KEPCO) in August 1997. As finally amended, the PWC had a value of more than $93,000,000.

The PWC was superseded by and became a part of the Turnkey Contract (TKC) which was signed by KEDO and KEPCO on December 15, 1999. The TKC became effective on February 3, 2000, after all conditions precedent to effectiveness were satisfied. These conditions included KEPCO's receipt of the governmental approval required under ROK law, and KEDO's conclusion of its loan agreements with the Export-Import Bank of Korea (KEXIM) and the Japan Bank for International Cooperation (JBIC). The TKC governs the entire scope of the LWR project.

The TKC is comprised of four volumes containing more than 800 pages. The contract is priced in three currencies (Korean Won, Japanese Yen and US dollars) with a base value equivalent to $4.182 billion. The price is subject to escalation in accordance with terms and conditions that are specified in the contract. The general terms and conditions of the TKC were adapted from the leading international model for turnkey contracts, the "Conditions of Contract for Design-Build and Turn-key," published by the Federation Internationale des Ingenieurs-Conseils (FDIC) in 1995. As adapted, the terms and conditions reflect and are suitable to the nature of the LWR project.

Under the TKC and its forerunner, the PWC, KEPCO created a construction complex at the LWR project site, Kumho, DPRK. Much of the work performed to date related to establishment of the infrastructure necessary to support the formidable LWR construction effort. The infrastructure work included housing, construction offices, medical facilities, dining and recreational facilities, banking offices, and other structures such as roads and bridges. In addition, KEPCO established independent supplies of reliable electricity, potable water, and communications.

At the LWR construction site, 5.4 million cubic meters of rock and soil have been removed (to include the leveling of a 60 meter tall mountain at the site) to expose the bedrock that now forms the foundation for the two LWR units (Unit 1 and Unit 2). Completion of site grading work enabled excavation of the building foundations, which began in early September 2001, after KEDO received the Construction Permit from the DPRK nuclear regulatory authority. The pouring of the foundations for the reactor's power block buildings took place in August 2002.

KEDO built a breakwater and barge-docking facility for the LWR project. The facility forms the intake channel for plant cooling water. Tetrapods, interlocking geometric shapes made of concrete, provide sturdy protection to the breakwater against ocean currents. The tetrapods were manufactured at the site. The on-site docking facility opened for operation in early April 2002. Other significant milestones included completion of a training center for operation and maintenance personnel and a simulator building.

Subsequent political events from late 2002 to January 2003 required KEDO to slow the pace of the construction work, and in 2003, to suspend the project altogether. Following the DPRK's announced withdrawal from the Treaty on the Non-Proliferation of Nuclear Weapons in January 2003, and its subsequent statements that it had reprocessed spent fuel rods to extract plutonium, the Executive Board of KEDO announced suspension of the LWR project for one year beginning December 1, 2003.

Slowing of construction activities began in February 2003 when work on Unit 2 was postponed, while work on Unit 1 continued at a reduced pace through most of 2003. Progress during this time included installation of eight rings of the Unit 1 Reactor Containment Building (RCB) liner plate (see picture of Unit 1 construction) and the pouring of exterior concrete up to ring 3 of the container liner plate. In addition, concrete pouring for the primary shield wall for Unit 1 RCB, for the base mat concrete for the Unit 1 Primary Auxiliary Building (PAB), and for Unit 2 RCB sump base mat and tendon gallery were completed to protect exposed reinforcing steel. KEPCO also completed the mud mats for the Turbine Generator Buildings (TGB) at both units and took steps necessary to prevent slope erosion on the partially excavated intake and discharge channels.

After the project's suspension was announced, work on the LWR project was continued to a point that permitted proper preservation and maintenance of the LWR structure and associated components. This includes taking steps to protect, store, and/or secure the partially-built LWR units, construction facilities, and equipment against deterioration, loss or damage during the suspension period. Preservation and maintenance work have been carried out in accordance with a detailed suspension plan that calls for following all approved codes and standards, or in their absence, manufacturer's recommendations. Based on this plan, KEPCO and its subcontractors have been performing preservation and maintenance activities at all LWR-related facilities, including the power block, supporting facilities, and the community area. Examples of this work include installation of membrane covers or protective coatings over exposed items such as reinforcing steel bars, anchor bolts, and at the concrete production facilities and periodic checks and maintenance of these measures. During implementation of the suspension, KEDO had reduced its presence in Kumho to a caretaker group of about 120.

Offsite preservation and maintenance activities are focused on all manufactured components and engineering and manufacturing-related documentation. This includes Nuclear Steam Supply System (NSSS), Turbine/Generator (T/G) and major Balance of Plant components. The manufactured components of these systems have been carefully packaged and stored in approved storage facilities. The condition of the packaged components is checked periodically to ensure that each component is being maintained in accordance with the approved codes and standards and/or manufacturers' recommendations. Engineering work continued on an as-needed basis, to provide the support necessary to preserve and maintain essential structures and components.